28Mar14

Dongfeng, Peugeot tie-up not limited to Asia Pacific

The chairman of China's Dongfeng Motor Group (0489.HK) said on Friday that
cooperation with French carmaker PSA Peugeot Citroen (PEUP.PA) is not
limited to the Asia-Pacific, and that Brazil and Russia are possible future
markets.

The Asia-Pacific region is just a "starting point" for the two firms' collaboration,
Donfeng chairman Xu Ping told a media briefing in Beijing. The two companies
officially signed an alliance earlier this week that will give a much-needed cash
injection to the troubled French automaker.

The two firms, which have a well-established joint venture in China,
announced they would deepen their business in the country and planned to
triple total sales to 1.5 million vehicles by 2020. They also aim to jointly build a
presence in Southeast Asia.

Chinese carmakers, including Dongfeng, have been ramping up overseas
expansion by building manufacturing plants overseas and taking stakes in
struggling foreign carmakers.

Earlier this week in Paris, during Chinese president Xi Jinping's European tour,
top officials from Dongfeng and Peugeot sealed a framework deal for
state-owned Dongfeng and the French government to take matching 14
percent stakes in Peugeot in a three billion euro ($4.1 billion) deal.

Dongfeng and Peugeot plan to develop new cars in an effort to grab a bigger
share of China's huge auto market, which is projected to grow further through
2020. They also hope to export more cars to other markets in Asia, especially
those in the populous Southeast Asia region.

[Source: Reuters, Beijing, 28Mar14]

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